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Family Law Blog

Comment on divorce & family law

Pre-nuptial agreements: new law proposed

By Luci Larkin, on Thursday March 6, 2014 at 9:00am

Pre-nuptial agreements have been headline news in the last week. A report from the Law Commission includes a draft bill which could, finally, make pre-nups and post-nups legally binding. If correctly drawn up, with both parties getting expert advice and happy to be involved voluntarily, they currently do carry weight with judges but are not backed by law.

The Law Commission has been considering for some time the case for legal reform with a view to “qualifying nuptial agreements” being given full effect in law. In short, the Commission has been looking at the advantages and disadvantages of such agreements generally. It is also considering what these should encompass, which would include:

an agreement between a couple,

each party intending to be legally bound

each party obtaining something from the agreement (though if the agreement were one-sided, this requirement might be met by simply entering into the document).

The historic safeguards required in relation to the parties each obtaining independent legal advice, and fully and frankly disclosing their financial situations to each other, have also been considered. Alongside this, when it should be signed, or if there should be any time limitations at all, is being looked at. Currently, best practice suggests this should be at least 21 days before the marriage but, ideally, at least three months.

The Commission’s final report has just been published but it is expected to explain the recommendations for reform, which would clarify and ensure that the law is applied consistently by the courts, reinforcing judicial best practice and, importantly, introducing qualifying nuptial agreements in the a draft Nuptial Agreements Bill. These would then be enforceable contracts, which would enable couples to make binding arrangements for the financial consequences of divorce or dissolution.

In order for an arrangement to be a qualifying nuptial agreement (be it made before or after marriage), certain procedural safeguards will still have to be met. They could not, however, be used by parties to get out of meeting the financial needs of each other and of any children.

The move recognises the fact that a growing number of couples are already entering into such agreements as a way of minimising uncertainty on the breakdown of their relationships. So is this move to give greater clarity and bring change to be welcomed?

Such agreements, if executed properly, have the potential to reduce conflict and costs for those who are seeking to end their relationship. Therefore reform of the law in this way should be considered a step forward. Nonetheless, it still remains absolutely vital that the law should also recognise that, for some couples, financial matters are inherently complex and there will need to be a degree of flexibility.

So whilst the case that pre and post nuptial agreements should be considered binding is a step forward, it also must be right that this can only be as long as the needs of children are satisfied and provided that the agreement does not result in an injustice.